Apple, Samsung spar over device ads, features

 

What are patents worth to consumers?

It was the end of a long week in court in Apple and Samsung's US legal war, as attorneys from the rival companies came at odds over documents and in-court behaviour.

The trial has captured the attention of the technology world in part because the stakes are so high: Apple accuses Samsung of copying the iPad and the iPhone, two of the most successful products in the history of technology.

If Apple wins, it may be able to block whole categories of competitors and cement its dominance of next-generation mobile computing. The Korean firm, which is emerging as one of Apple's most powerful global challengers, has counter-attacked by alleging that Apple infringed some of its key wireless technology patents.

But the trial is also titillating to the technorati because of the unusual up-close-and-personal look it has provided into the secret world of Apple.

Phil Schiller, Apple's long-time marketing chief, stood in the hallway before testifying one day last week, making small talk as reporters looked on. Normally seen in blue jeans — even during product launches — one of Schiller's handlers teased him about his dark suit and yellow tie.

On the witness stand, Schiller talked about how Samsung's products impact ad campaigns; Apple has spent about $US647 million on advertising for the iPhone since its 2007 launch, and over $US457 million on the two-year-old iPad.

"If you're driving down the highway 55 miles an hour, you have a split second to see a phone on a billboard," Schiller said.

"If it looks very, very similar and is copied, whose phone was that?"

Earlier, Apple industrial designer Christopher Stringer took the stand, looking every bit the part in a cream-colored suit and shoulder length hair. He offered trivial details about the Apple design process — people work around a kitchen table — but in the information vacuum that surrounds Apple's internal workings, trivia tops nothing.

The mountain of documents filed in the case — more than 1600 docket entries and counting — are anything but trivial, though.

Detail about licensing negotiations between Apple and the South Korean company, early design ideas for the iPad, and even profit margins for the iPhone and iPad have been revealed. (On every $US499 iPad, between $115 and $160 flowed into Apple's cash pile through the end of March 2012.)

US District Judge Lucy Koh is the first Korean-American to ever serve as a district court judge: her parents immigrated to the United States and Koh spent a good deal of her childhood in Mississippi, attending majority African-American public schools, according to a biography from Harvard Law School, her alma mater.

Each day of the trial, Koh trudges to her seat holding a stack of thick binders with both hands. She keeps a close eye on the jury, at one point offering them caffeine.

The judge gave Apple and Samsung 25 hours each to present their evidence, but timing the attorneys' legal arguments has now become one of her favorite devices in trying to get them to conform to her standards.

On Tuesday, Koh said she would allow the jury to hear about a study about consumer confusion between Apple and Samsung products. Samsung attorney Charles Verhoeven asked to reconsider. Koh started the clock, and Verhoeven ultimately convinced Koh to keep the study out. It took six minutes.

Koh said she would charge each side three minutes, prompting Apple attorney Michael Jacobs to moan.

"If it doesn't kill you, it won't hurt you, okay?" Koh said, without smiling.

Decision-making

 An Apple expert witness testified on Friday that consumers would be willing to pay $US100 for three patented smartphone features that are at issue in its high stakes trial against Samsung.

John Hauser, a marketing professor at MIT, said he surveyed consumers over the internet about how much they would pay for some of the technology in the lawsuit, like scrolling and multitouch, which Apple claims Samsung stole from the US company.

However, Samsung hammered Hauser on whether his study actually relates to real world customer decision-making.

Additionally, Apple patent portfolio director Boris Teksler described the company's licensing strategy, saying he could count "on one hand" the number of instances it has permitted other companies to use its design patents. Teksler did not name those companies.

As the second week of trial drew to a close in a San Jose, California federal court, most of the testimony focused on technical patent features.

However, toward the end of the day Hauser said tablet consumers would be willing to pay $US90 for the same patented features as what they would pay $100 for on smartphones. That information could be relevant when calculating potential damages for Apple, which is seeking over $2.5 billion from Samsung.

Samsung attorney William Price asked Hauser why he didn't tell jurors what consumers would pay for features like additional computer memory on different tablet models. Those could be compared to the real world prices that Apple charges, Price said.

While Hauser said he was confident in his methodology, he eventually acknowledged that his results do not necessarily correspond to what customers would actually pay for such technology in the real world.

"This relates to it but it's not it, no," Hauser said.

Teksler took the stand after Hauser finished. While Apple is open to licensing certain categories of patents, Teksler said, it is highly resistant to giving other companies access to technology it deems core to its "unique user experience".

All of the patents in Apple's lawsuit against Samsung fall into that special category, Teksler said.

After Samsung released its Galaxy S phone in the summer of 2010, Teksler said, former Apple chief executive Steve Jobs and current CEO Tim Cook, personally contacted Samsung to complain.

Apple is one of Samsung's biggest customers for smartphone and tablet component parts.

"We were quite shocked," Teksler said. "They were a trusted partner."

Teksler is expected to continue testifying on Monday.

(Editing by Richard Chang, Jonathan Weber and Jim Loney)

 


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